...biological" benefit. It may be necessary to return 
here, but on the theme of development etc.). 

Frank. "Changes in Württemberg Agriculture," Dissertation, 1902. 

BIBLIOGRAPHY 

Literature: 

Johann Huber. "Participation of Workers by Capital in British 
Productive Cooperatives and in Their Management." 
1912, Stuttgart. (Issue 4 of the "Basel National Economic 
Research.") 

Goetz Briefs. "The Spirits Cartel." Karlsruhe, 1912. (Issue 
7 of "National Economic Research of the Baden Higher 
Schools.") 

Kurt Goldschmidt. "On Concentration in the German Coal 
Industry." Karlsruhe, 1912. 

Julius Wolf. "The National Economy of the Present and Future." 
Leipzig, 1912. No. 1. 

H. Levin. "The Present Situation of Joint-Stock Commercial 
Banks in Russia (1900-1910)." Freiburg in Breisgau, 
1912. (Dissertation.) 

K. Dove. "Economic Geography." Leipzig, 1911. 
("From the Realm of Nature and the Spiritual World.") 

" " "Economic Geography of German Colonies." 
1902. 

Kurt Schwabe. "In the German Land of Diamonds." Berlin, 1910. 
(South Africa and German Economy in the Colonies.) 

Rud. Lenz. "The Copper Market Under the Influence of Syndicates 
and Trusts." Berlin, 1910. 

Leon Baretti. "Concentration of Provincial Banks in France." Paris, 
1910. (Articles were in "Annales des sciences politiques.") 

* See this volume, p. 45-47. Ed. 

NOTEBOOK "O" ("BETA") 

Gustav Ruhland. "Selected Articles." 1910 (published by the "Union 
of Rural Proprietors." Against plutocracy in Germany!!). 

A. H. Raunig. "Balance Between Agriculture and Industry." Vienna, 
1910. 

Dr. Walter Kundt. "The Future of Our Overseas Trade." Berlin, 1904. 
Mere chatter. 

EXTRACTS FROM THE JOURNAL "DIE BANK" 

"Die Bank." "Monthly Journal of Finance and Banking." 
(Publisher: Alfred Lansburgh) 1914, 2nd (half-year), p. 1042. 

According to the data of the Department of Trade (London) imports 
and exports in millions of pounds sterling: 

(First half-years) 

7 months     Import  Export 
1/I—1/VIII/ 1912  1913  1914  1912  1913  1914 

England       296.1  319.7  375.8  225.8  257.1  255.4 

Germany      260.8  267.9  269.3  205.4  243.1  249.3 

United States *  215.3  212.8  237.7  255.8  271.8  245.7 

France *        192.8  196.4  198.8  149.8  156.4  153.3 

(Ibidem, p. 713). Note "Banks 
and the Postal Service." The boundaries between 
banks and, for example, savings banks "are increasingly 
being erased." Hence the complaints of the banks. The 
Erfurt Chamber of Commerce comes out in favor of banks 
against the "latest invasion of the postal service into 
monetary circulation" (in the form of "issuance of postal 
letters of credit"). The editorial staff remarks that postal 
letters of credit operate only within the German Empire, 
while bank letters of credit mainly serve travelers abroad, 
and "the public exists, after all, not only for the sake 
of banks" (714). 

BANKS AND THE POSTAL SERVICE 

This "not only" is
magnificent!!!

In the article "Thoughts on the Billion Loan," p. 932: 

"He who subscribes to the loan possesses free means, 
but mostly not in the form of ready cash, but in the form 
of a current account in a bank or a deposit in a savings 
bank, cooperative, etc. These institutions have at their 
disposal in Germany, in round figures, 35 billion marks of 
such liquid means, about half of which can immediately 
come into the free disposal of the owners, and the other 
half after prior notice—mostly within a month" (933). 

The matter consists, that is, in the transfer of property from 
the accounts of private persons to the account of the state (and 
back in payments to suppliers, etc.). 

All credit institutions have at their disposal "no more 
than 1/2 billion" in cash, counting "their total sum in ready 
cash and deposits in the State Bank" (933). 

France in 1871 paid 5 billion in such a way that of them only 
742.3 million was paid in gold, silver, and banknotes, while the 
remainder (4,248.3 million) was paid in bills of exchange. (France 
therefore recovered so quickly in 1870/71 because it did not 
touch its currency, did not issue excessively "uncovered banknotes"). 

p. 903 et seq.: "The Displacement of London as 
the World's Clearing House" by Alfred Lansburgh. 

A very good article clarifying the reasons for England's 
power. The main reason: "the absolute preponderance of English 
commercial and monetary circulation over the commerce of all 
other countries" (909). Greater than German commerce "in round 
figures by 50%" (ibid.). And furthermore, commerce with colonies!! 

viz. "Three-quarters of world commerce belongs 
to England" (910) 

"This means that three-quarters of all international payments flow 
directly or indirectly through England" (910). 

"Bills denominated in pounds sterling" "predominate" still in Japan, 
then China, Chile, Peru, southern Persia, "most of Turkey" (910)— 
"the widespread knowledge of the English language in commercial 
circles" (910). 

And then England finances this world commerce 
(the cheapest rate of interest; the most stable gold currency; 
1 pound sterling = 7.32 grams of gold, etc., etc.). 

NOTEBOOK "P" ("BETA") 

The "enormous" monetary means of England, its 60 
colonial banks (911) etc., etc. 

A saying of a bank director (Brazilian Bank) Kemmerer (a German): 

(913) "The first thing necessary for opening 
an overseas banking enterprise is—credit, 
a banker-acceptor in London." 

p. 912, note: "Regarding the difficulties encountered by German 
overseas banks in introducing bills of exchange in marks in South 
America, compare Yaffe, 'English Banking,' 2nd edition, 98-101, 
'Frankfurter Zeitung,' 29. VIII. 1914; 'Hamburger Nachrichten,' 
15. IX. 1914" (I omit other citations). 

"Indeed, every country that transitions to a gold currency and 
possesses, as is almost everywhere the case, a large portfolio of 
English bills of exchange as a substitute for gold, subjects not only 
the greater part of its international payment circulation to the 
London clearing house, but also directly promotes the consolidation 
of English world monetary power; the constant possession of a large 
portfolio of English bills of exchange means in practice nothing other 
than that the given country places at London's disposal significant 
means, which London in turn can utilize and actually does utilize for 
further financing of foreign countries' external trade, and thereby for 
strengthening its own currency and its own clearing function. Thus, 
as a consequence of the gold value of the pound sterling, England 
constantly has the opportunity, in addition to its own large capitals, 
to serve its credit system with several billion marks of other people's 
money" (913-914). 

To displace England from its role requires "enormous monetary 
means and a low rate of interest" (916)... "And it is necessary not 
only to be capable of providing enormous monetary means, but also 
to have the ability to guarantee the absolute stability of that currency 
which is to replace the English one, i.e., one must always be ready to 
pay in gold." 

V. I. LENIN 

Therefore, so we are told, the plan of the "National City Bank" 
(Morgan Bank) or of Swiss banks is a "utopia"—those banks "which 
hold the view that a little good will is quite sufficient to wrest 
international settlements from London or a considerable part of them—
a goal which, it is true, is highly desirable, but can be achieved only 
on the condition that some other country could place at the service 
of world commerce interests the same mass of credit, the same complex 
of trade, banking, and interest advantages, and the same reliable 
currency basis that England, at least until the beginning of the war, 
placed at the disposal of world circulation" (920)... 

(1914, November and December). "Covering War Expenditures and 
Its Sources," an article by Alfred Lansburgh. 

The author cites Lloyd George (in IX. 1914): "In my opinion, the 
last hundred million pounds sterling will decide the outcome of the 
war. The first 100 million our enemies can obtain as easily as we can; 
but the last 100 million, thank God, they will not be able to obtain" 
(p. 998). 

And the author replies that Lloyd George was mistaken. Four sources 
for coverage: 1) reserves of the "first degree" = ready cash (in France 
and Russia there is more than in Germany; in England less. Here 
Germany is weaker). 2) reserves of the "second degree": short-term 
claims in world commerce. (England is far stronger: "If England is 
the world banker, keeping its money in liquid form, then France is 
the world financier, investing its means") (1001). 3) Net income from 
the country's production + 4) that part of gross income going to 
amortization (or to accumulation). And here, so we are told, we are 
not weaker. 

But at the same time the author reckons on exports that will go 
surreptitiously ("by hidden routes"), but will not disappear. 

The low rate of exchange on our bills (Germany's) proves, so we are 
told (XII. 1914!!!), that exports are insufficient, do not correspond to 
"our expenditures abroad" (1103). 

NOTEBOOK "P" ("BETA") 

Compare p. 1112: "Only when exports are sufficient to 
fully cover imports and military expenditures abroad 
does the national economy truly stand on a war footing." 

1914, 1 (May). "Bank with 300 Million," an article by A. Lansburgh. 

The "Disconto-Gesellschaft" absorbed the "Schaffhausenisches Bankverein" 
and raised its joint-stock capital to 300 million marks (p. 415)*. 

"Thus for the first time a truly large German bank becomes the victim 
of the concentration process" (415). 

The "Deutsche Bank" raised its capital to 250 million marks. To this 
the "Disconto-Gesellschaft" responded with a "merger" with the 
"Schaffhausenischer Bankverein" and raised it to 300**. 

"With 300 million marks of joint-stock capital it becomes for now the 
largest bank not only in Germany but in the entire world" (422). 

The "struggle for hegemony" had seemed decided in favor of the 
"Deutsche Bank"; now it has begun again: 

"Other banks will follow the same path... and from the 300 people 
who now economically rule Germany, there will eventually remain 
50, 25, or even fewer. Nor should we expect that the latest 
concentration movement will be limited to banking. The close 
connections between individual banks naturally also lead to 
rapprochement between the syndicates of industrialists whom 
these banks patronize. Syndicates, as well as business cycle 
fluctuations, lead to further unions, and one fine day we shall 
awake to find before our astonished eyes only trusts; before us 
will stand the necessity of replacing private monopolies with state 
monopolies. And yet, in essence, we have nothing to reproach 
ourselves with, save that we allowed the development of things 
to take its free course, somewhat accelerated by competition 
(426)***. (End of article.) 

* See V. I. Lenin. Works, 4th ed., vol. 22, p. 203. Ed. 

** Ibid. Ed. 

*** Ibid. Ed. 

V. I. LENIN 

"SUBSIDIARY COMPANIES," an article by Ludwig Eschweige, p. 544 
et seq. (May 1914). 

At the beginning of 1912, the large banks (yielding to pressure from 
the State Bank) introduced a new balance sheet scheme. But thousands 
of joint-stock companies continue to print brief ("narrow") balance 
sheets, not exceeding the requirements of the law—supposedly 
guaranteeing against speculation through the brevity of balance 
sheets!!! In reality, however: 

"In reality, what is achieved by this" ("brevity of reports") "is merely 
that a few better-informed persons can enrich themselves at the 
expense of the herd of shareholders, especially if the brief reports are 
joined by a sophisticated system of distribution by line items, thanks 
to which important data become invisible to the eye of an ordinary 
shareholder. Boards of directors and their good friends thus have a 
double advantage: when things are going well, to be the sole possessors 
of all information about how the price rises, and when deterioration 
approaches, to avoid expected losses through timely sale of shares. 

For example, the "Aktiengesellschaft für Federstahlindustrie 
in Kassel" a few years ago was considered one of the most 
profitable enterprises in Germany. Poor management 
brought matters to such a point that dividends over 
several years fell from 15% to 0%. As it turned out, the 
board, without the knowledge of the shareholders, had given 
as a loan to one of its "subsidiary companies," Hassia, a 
limited liability company whose nominal capital consisted of 
a few hundred thousand marks, the sum of 6 million marks. 
This loan, which was nearly three times the joint-stock 
capital of the "parent company," appeared nowhere in the 
latter's balance sheets; legally such an omission was entirely 
lawful and could have lasted a full two years, as not a single 
paragraph of commercial law was violated by it. The chair 
of the supervisory board, who, as the responsible person, 
signed the false balance sheets, was and remains the chair 
of the Kassel Chamber of Commerce. The shareholders 
learned of this loan to the "Hassia" company only long 
after it had proven to be a mistake, and when the shares of 
"Federstahl," due to being unloaded by those in the know, 
had fallen in price by approximately 100%. Only then, 
through a change in the balance sheet method, was the 
corresponding line item revealed. This typical example of 
balance sheet manipulation, most common in joint-stock 
companies, explains to us why boards of joint-stock 
companies undertake risky affairs with far lighter hearts 
than private entrepreneurs. The latest technique of balance 
sheet compilation not only gives them the opportunity to 
hide risky affairs from the average shareholder, but also 
allows the principal interested parties to shift responsibility 
through timely sale of their shares, in case of experimental 
failure, whereas the private entrepreneur answers with his 
own skin for all that he does" (545). 

"The balance sheets of many joint-stock companies resemble those 
palimpsests known from the Middle Ages" (parchment), "on which one 
had first to erase what was written in order to uncover the signs 
beneath it, giving the true content of the manuscript" (545)... 

Parchment, on which the first basic manuscript was erased and then 
something else written over the erasure. 

..."The simplest and therefore most frequently used means of making 
balance sheets impenetrable consists in dividing a single enterprise 
into several parts through the establishment of subsidiary companies or 
through the attachment of such. The advantages of this system from 
the point of view of various purposes—lawful and unlawful—are so 
obvious that at present it is directly an exception when large 
companies have not adopted this system" * (545-546). 

* See V. I. Lenin. Works, 4th ed., vol. 22, p. 216-218. Ed. 

V. I. LENIN 

Thus a certain "opacity of their operations" is achieved (ibid.)... 

A particularly outstanding example is the "Allgemeine Elektrizitäts-
Gesellschaft" (billions in subsidiary companies)... 

(compare 1908. Issue 8: "The Rathenau System." "Die Bank," 
on AEG's methods) 

(Taxes are higher, because on them [subsidiary companies] there are 
special taxes, but then profits are higher, and the secret is protected!!...) 

Author's italics: "Subsidiary companies are an ideal means by which 
one can compile objectively false balance sheets without coming into 
contradiction with the provisions of the commercial law code" (549). 

..."The decisive factor is that through the latest system of distribution 
by line items, possibilities of disguise are created" (ibid.)... 

Another example: 

"Oberschlesische Eisenindustrie Aktiengesellschaft" (p. 550-551) shows in the 
balance sheet "participations" = 5.2 million marks. 

Which ones? The author learned privately: 60% of shares—"Gleiwitzer 
Steinkohlengruben" 

(and this company has 20 million marks in debts!!) 

((End)) 

Ibid. p. 340 (April) (Berlin Major Banks, 28. II. 1914). 

Balance Sheets of Berlin's Major Banks. 
Balance sheets: 8 banks ("Deutsche Bank," "Disconto-Gesellschaft," 
28. II. "Dresdner Bank," "Darmstädter Bank," "Schaffhausenischer 
1914 Bankverein," "Nationalbank für Deutschland," "Commerzund 
Disconto-Bank," + "Mitteldeustche Kreditbank"). 

[In Millions of Marks] 

Joint-stock capital           = 1,140.0 mn. 
Reserves                      =   350.
Bills of exchange, etc.       = 1,956.10 
Consortium 
participations                =   278.
Debtors                       = 3,036.03 
Long-term 
participations                =   286.
Total of balance sheets       = 8,103.71 

NOTEBOOK "P" ("BETA") 

Savings Banks (1910) 
(including postal savings banks)  (p. 446) 

[In Millions of Marks] 

Germany               16,780       Denmark            603 
Austria                5,333       Luxembourg          49 
Hungary                1,876       Sweden             961 
Italy                  3,378       Norway             570 
France                 4,488       Spain              340 
Great Britain          4,518       Romania             50 
Russia                 3,019       Bulgaria            36 
Finland                  190       U.S.A.           17,087 
Switzerland            1,272       Australia          1,213 
Holland                  464       New Zealand         319 
Belgium                  830       Japan              662 

p. 496: Critique of "emission statistics": 

(mostly this statistics (in the statistics of "Frankfurter Zeitung" 
and "Der Deutsche Oekonomist" there are many valuations) is very 
inaccurate, gives maximum, not reality. Issue of shares = can be 
a transfer of debt into another form. 

Compare Dr. Hermann Kleiner. "Statistics of Emissions in Germany." 
Berlin, 1914. 

And M. Marx (dissertation). "Statistics of Emissions in Germany and 
Certain Foreign States." Altenburg, 1913. 

No. 8 

1914, 1, p. 316 (article by Lansburgh). The Stock Exchange versus 
the Bank: 

..."The stock exchange long since ceased to be the necessary 
intermediary of circulation that it was formerly, when banks 
could not yet place most of the securities being issued among 
their clients"*. 

No. 6 

(March 1914) p. 298 — "New Era of Concentration" 
(in banking) — in connection with worsening of business 
conditions, etc. 

("Bergisch-Märkische Bank," this 80-million Rhenish enterprise 
with its 35 branches will soon be absorbed into the "Deutsche Bank": 
p. 298.) 

* See V. I. Lenin. Works, 4th ed., vol. 22, p. 206. Ed. 

V. I. LENIN 

"For if the union does not always make..."